Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the proposal contained in the report The Impact of Changes to Inheritance Tax on Farm Estates, published by the Centre for the Analysis of Taxation in August, to apply 100 percent relief on estates up to £2 million, with no additional relief above that threshhold.

The Government believes its reforms to agricultural property relief and business property relief from 6 April 2026 get the balance right between supporting farms and businesses, and fixing the public finances and supporting public services. The reforms reduce the inheritance tax advantages available to owners of agricultural and business assets, but still mean those assets will be taxed at a much lower effective rate than most other assets. Despite a tough fiscal context, the Government will maintain very significant levels of relief from inheritance tax beyond what is available to others and compared to the position before 1992. Where inheritance tax is due, those liable for a charge can pay any liability on the relevant assets over 10 annual instalments, interest-free.

The report by the independent Centre for the Analysis of Taxation (CenTax) supports the Government’s analysis of these reforms, including the number of estates affected in 2026-27, and concludes that half of these estates will see an increase in their effective inheritance tax rate of less than 5 percentage points, and almost 90 per cent of these estates could pay their entire inheritance tax bill out of non-farm assets. In CenTax’s opinion, the Government’s proposed reforms improve on the current position and are expected largely to meet the Government’s objectives.